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More Dwight Howard Rumors...**signs with Rockets**

Also as an added note many tenets of the new CBA didn't kick in until now or even next year.
The cap penalties were specifically set to get more onerous.

21. What is the "luxury tax?" Why does it exist? How is it determined? Who pays it?
The luxury tax is a mechanism that helps control team spending. While it is commonly referred to as a "luxury tax," the CBA simply calls it a "tax" or a "team payment." It is paid by high spending teams -- those with a team salary exceeding a predetermined tax level. These teams pay a penalty for each dollar their team salary (with a few exceptions, see below) exceeds the tax level. The tax level is determined prior to the season, and is computed as follows:

For 2011-12 the league and players association agreed to use a figure of $70.307 million for the tax level.

In 2012-13 the tax level was determined by taking 53.51% of projected BRI (see question number 13), subtracting projected benefits, and dividing by the number of teams in the league1. For 2012-13 the tax level was guaranteed to be no less than $70.307 million.

Starting in 2013-14 they apply the same formula as 2012-13, except there is no guaranteed minimum.

Starting in 2012-13, the tax level may be adjusted based on what happened during the previous season:

If the league didn't pay the players enough the previous season, i.e., if they had to cut the players a supplemental check to make their guarantee, then the shortfall, divided by the number of teams in the league1, is added to the tax level. For example, if the players are paid $15 million less in 2012-13 than they are guaranteed, then the 2013-14 tax level is adjusted upward by $500,000.

If there is an overage -- i.e., if the players were paid more (pre-escrow) than their guaranteed share in the previous season -- and the system is getting close to exceeding what the league can get back through the escrow system, then the tax level (and salary cap) may be reduced in order to put on the brakes (see question number 20 for more information).

The amount of tax a team pays depends on the season, the team salary as of the team's last regular season game, and whether the team is a "repeat offender":

For 2011-12 and 2012-13, teams pay $1 for every $1 their team salary exceeds the tax level. There is no repeater rate.

For 2013-14 teams pay an incremental rate based on their team salary. There is no repeater rate.

For 2014-15 teams pay an incremental rate based on their team salary. They pay the repeater rate if they also were taxpayers in all of the previous three seasons.

For 2015-16 and all subsequent seasons, teams pay an incremental rate based on their team salary. They pay the repeater rate if they were taxpayers in at least three of the four previous seasons.

A team with a team salary $12 million over the tax level in 2011-12 pays a tax of $12 million.

A team with a team salary $12 million over the tax level in 2013-14 pays a tax of $21.25 million (the incremental maximum of $7.5 million for $0 to $4,999,999, plus the incremental maximum of $8.75 million for $5 million to $9,999,999, plus $2 million times the incremental rate of $2.50 for $10 million to $14,999,999).

A team with a team salary $4 million over the tax level in 2015-16 pays a tax of $10 million ($4 million times the repeater rate of $2.50 for $0 to $4,999,999) if they also were taxpayers in three of the previous four seasons, or pays a tax of $6 million ($4 million times the non-repeater rate of $1.50 for $0 to $4,999,999) if they were not taxpayers in at least three of the previous four seasons.

When determining the amount of tax a team owes, the league uses its team salary (see question number 14) on the date of its last regular season game (i.e., if a player is traded away before the end of the season, then none of his salary is taxed), with the following adjustments:

Cap holds and exceptions are ignored.

Any "unlikely bonuses" (see question number 72) that were actually earned are added to the team salary.

Any "likely bonuses" (see question number 72) that were not earned are subtracted from the team salary.

Any trade bonuses (see question number 96) for players received in trade after the last regular season game are added to the team salary. This amount may be pro-rated -- see question number 97 for details.

Any amounts from settlements of grievances are added to the team salary.

For players who signed as free agents (i.e., not draft picks) under the current CBA, and make less than the two-year minimum salary, the minimum salary for a two-year veteran is used in place of their actual salary.

For minimum salary players whose salary is partially paid by the league (see question number 16) only the amount paid by the team (the two-year minimum salary) is taxed.

The salaries of players waived via the Amnesty provision (see question number 67) are exempt from the luxury tax.

Here are the tax levels in each season, and the teams that paid the tax:

Season Tax Level Taxpaying Teams (amount paid in $millions)
2011-12 $70.307 million Lakers ($12.6), Celtics ($7.4), Heat ($6.1), Mavericks ($2.7), Spurs ($2.5), Hawks ($0.7)
2012-13 $70.307 million
In addition to the financial penalties, a number of restrictions are placed on taxpaying teams, which are described in question number 23.

1 All formulas that divide by the number of teams in the NBA (currently 30) ignore any expansion teams in their first two seasons in the league.

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Luxury tax didn't kick in just this upcoming season. It actually started last season. Prior to last season, teams used to pay a dollar for dollar penalty for however much they were above the cap. As of last season, that increased and it's designed to increase year to year for however long in and 5 year period you are over.

However, as I have already stated, because the Lakers have a very lucrative TV deal with Turner, they can afford to absorb those penalties if they chose to. It is expensive and they would have to pay an ever increasing amount but they could do fairly easily if they wanted to.
Now, we've wasted a bunch of time on this issue when in reality, the Lakers will not be cap strapped long. If they simply make two moves this year, they would save themselves close to 40 million in cap in this year alone. If Kobe can not play this year, they could save themselves another 24 million or 64 million total just this seasons and that does not count DH leaving the team. If DH leaves the team and they make those other moves, that's another 20 million of the cap.

In short, the Lakers don't have a cap problem unless they decide to have one. All this stuff you have going on in your head is simply not true.

You said the Lakers can't make a trade with DH. I said that's not true because it's not. True or false, up to July 1st, the Lakers still hold the right to DH?

Let me answer that for you. It's true.

Why would Howard agree to a sign and trade? He would agree because he doesn't want to just sign with any team. Howard is not going to play for the Pelicans simply because they can afford him. Wake up. He want's to go to some very specific teams, of which, none have the cap to sign him outright. What does that mean? That means that in order to sign him, players must be traded in order to create space. That's what it means to sign Dwight Howard and that's why it would be smart of him to stay with L.A.

Now, I know that in your head, you like to believe that the Lakers are pretty much screwed but as I've explained many times over, that's simply not the case.

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holy crap dude you are wrong about every single thing you stated....

1st and easiest. The NBA will not process a trade for Howard prior to July 1st. He would simply not show up for the new team before becoming a free agent.
The league knows this and wouldn't process the request to simply rescind it in 24 hours.
So it is actually NOT even possible theoretically. And thus has never been mentioned except in your head.
Beyond that the Lakers are spending millions on a campaign to get DH to resign with them.
They aren't doing that to trade him before he hits FA which they always knew was coming.

2nd Unless you believe there is an even 1% chance of that trade happening you are in fact being intellectually dishonest. That's making an argument to win an argument and ignoring the VERY valid point that GS or NO OTHER team can get DH without him desiring to go there. Repeating what I said as if it is your own point again is simply poor board manners.

3rd. Dallas, Hou, ATL the 3 teams Broussard and others state DH prefers ALL have means of reaching full cap space for DH AT ANY TIME. ATL has the space now. DAL is 2m off that space right now with very tradeable assets like Vince Carter and Shawn Marion. DH shares an agent with Marion who can simply opt out same time as DH. Dallas can immediately resign him to a 3 year deal for 18 million and hand DH his max deal. HOU has the same mechanism where as soon as DH says yes, they can move guys in a heartbeat.

4th. Nothing you've said about the Lakers is remotely accurate in the real world. What they can do and assuming they can do all of those things are completely different beasts. The have MULTIPLE bad contracts, No tradeable 1st round picks for 5 years. They are over the luxury threshold so can add only 1 3m player if they resign DH and can not dump major salary. No one wants MWP. Gasol can be traded but he isn't going to bring much if any return due to contract size.

The Lakers sit at 79 million WITHOUT DH OR ANY MONEY FROM A S&T. They will remain over the cap if DH leaves for nothing, they trade Gasol off for a couple future 1st rounders and they add zero salary.
Kobe is 30m. Nash is over 9. Add another 8 mil for Steve Blake and Chris Duhon. That and cap holds gets you right to the cap. So even if they also amnesty MWP the best they can do is get slightly below the cap in 2013 which really just lowers cap tax and offers few other benefits except a higher MLE to use on a single budget player.

But wait... they'll have tons of cap room in 2014!!! Yes they will. IF they give up the rights to Kobe Bryant making him a Free Agent minus Bird Rights.
At that point they'd have 9.5m for Nash and a bunch of cap holds plus possible a 3m guy from this year and then there is of course DH or not. WITH DH and NO KOBE they'd be able to sign one max guy if they could create a tiny bit more space.
They went all out last year to win a title.
That plan was always flawed as I noted on this board.
But it didn't just fail it backfired in the worst possible way.
All 3 of the big guns were injured and the cap space for the two they retain rights for equal 40 million dollars.
So they've got 40m in injured cap space.
No one will take Nash for even a 2nd round pick. He is owed 19m and 2 more seasons.
No one would take Kobe with his injury and 30m salary.
Those are issues they can not get around.

5th Teams may well do a S&T for DH. DAL and HOU would prefer it. ATL would likely not.
But LAL isn't getting back any real value for DH from those teams and would be hard-pressed to WANT to make that deal thus the reports are LAL is NOT willing to S&T DH anywhere.
The Lakers are far better off tanking for a strong 2014 class and dumping all the vet salaries they can. Return with a resigned for cheaper Kobe and a completely new roster in 2014.

Luxury tax didn't kick in just this upcoming season. It actually started last season. Prior to last season, teams used to pay a dollar for dollar penalty for however much they were above the cap. As of last season, that increased and it's designed to increase year to year for however long in and 5 year period you are over.

However, as I have already stated, because the Lakers have a very lucrative TV deal with Turner, they can afford to absorb those penalties if they chose to. It is expensive and they would have to pay an ever increasing amount but they could do fairly easily if they wanted to.
Now, we've wasted a bunch of time on this issue when in reality, the Lakers will not be cap strapped long. If they simply make two moves this year, they would save themselves close to 40 million in cap in this year alone. If Kobe can not play this year, they could save themselves another 24 million or 64 million total just this seasons and that does not count DH leaving the team. If DH leaves the team and they make those other moves, that's another 20 million of the cap.

In short, the Lakers don't have a cap problem unless they decide to have one. All this stuff you have going on in your head is simply not true.

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You really should just read and stop typing.

The cap laws are changing EVERY year. and they are more and more punitive EVERY year for being over the cap.
YOUR point was the Lakers have shown they are willing to spend whatever it takes to win under this CBA.
Again that is really bollocks. They simply haven't done so and do not have long term cash tied up indicating they are in fact willing to eat 3 or 4 progressive penalties in a row.
The Knicks and Nets are and as such they've made crazy signings.

Kobe isn't coming off the books unless the Lakers amnesty him. That's it. He says he'll be ready to go and isn't retiring.

The other moves you speak off are moving Gasol for nothing but future draft picks at 19m. Yup. Can POSSIBLY do.Team would have to have that much cap space to make that workspace or salaries would have to be within 10%.
Amnesty MWP, yup can do and can eat only like 3m of that salary. Frees up all of 6m.
Problem is they are at 79M right now. Try doing actual math instead of chattering about wildly.

That's 54m without DH, Gasol or MWP. Now you add cap holds for empty spots at ~500k per slot and they are at the 58m salary cap.

LA doesn't need to trade or amnesty anybody. All they have is Steve Nash on the books after next season.

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that's not how the NBA salary cap works.
they have holds or qualifying offers for every player that is becoming a free agent.
you either renounce those rights or you owe Kobe alone 30m in cap holds.

lal either has cap space and no players or talent but a terrible cap situation.
that is because their 3 best players ALL make over the current max salary. Kobe, Gasol, DH.

they clearly want DH to be the future. Thats 21m. 30m is the cost of holding Kobe's rights.
That's the cap right there with cap holds for other roster spots.

what they'd like to do is resign DH, have kobe take a massive pay cut (to say 10m ---good luck with that)and do so quickly like day 1 of free agency next year and build around those guys.

If they lose DH they probably totally reboot and start over which would get them out of cap hell.
If they resign him they won't do so and will struggle along for a bit with few means to get better.
They are WELL over the cap for 2013 and to go well under in 2014 they'd have no roster.

This isn't complicated. Follow the train of thought to the logical conclusion. Know the basic CBA rules and there is a reason people who know this stuff are wondering what the Lakers will do to dig themselves out of this hole.

I'm talking about 2014/2015. As far as players salaries on the books all they have is Nash at 9m, at least that's what I remember last time I looked. I realize they will need other players. I'm just saying they have a clean slate after after next season, which is pretty much identical to the Dallas situation. They do not need to trade anybody to resign Dwight Howard and that is a fact and that was my statement.

Also, Marion has to opt out by tomorrow (today actually) and he is not going to do so. It looks like Dallas is going to have to trade him in a possible DH scenario or move a different asset. It's not difficult to do but that is the situation.

I'm talking about 2014/2015. As far as players salaries on the books all they have is Nash at 9m, at least that's what I remember last time I looked. I realize they will need other players. I'm just saying they have a clean slate after after next season, which is pretty much identical to the Dallas situation. They do not need to trade anybody to resign Dwight Howard and that is a fact and that was my statement.

Also, Marion has to opt out by tomorrow (today actually) and he is not going to do so. It looks like Dallas is going to have to trade him in a possible DH scenario or move a different asset. It's not difficult to do but that is the situation.

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You are correct that it is similar to Dallas two years ago EXCEPT the cap is more punitive now and the CBA more restricting.
This is why Cuban disbanded the team that beat the Heat.
Being well over the cap now is very painful because you have very limited means of getting better.

Again and slowly... Your cap amount consists of the players you have signed, any cap holds(i.e. any player's Bird rights, right of first refusal et al cost you his previous salary plus 5%), ~500k per slot up to a full roster, any leftover amnesty hits.
LAL will have rights to as many as 12 guys. Each of those will have a cap cost of some sort unless fully renounced.
Having only Nash under actual contract only means they COULD dump a season totally and renounce everyone.
Your calculation is assuming they do that. It is also assuming they get to 2014 without adding any player on a deal beyond this year.

Dallas has ZERO 2014 contracts EXCEPT the 1.5m for Shane Larkin if he isn't traded by then.
What makes Dallas different than the Lakers is Dirk has already stated they wont need a 23m cap hold for him because he is signing a major pay cut day 1.

For this year Marion was fully expected to opt in and make the 9m. DAL reportedly has an offer at any time from CLE to take Marion.
This would put Dallas 7m under the cap AFTER signing DH.
The only thing Dallas needs to worry about is DH actually wanting to sign here.
If not they are going to to find three 6/7 mil a year players and try to build the nucleus then shoot again next year for a max player.

Again to detail the two teams:
Dallas: 18m under cap today. All its draft picks (except a future r1 to OKC with restrictions) including an extra 2nd next year.
A star player willing to play for a far below market salary.
A quality Coach who has won an NBA title and taken 3 teams deep in the playoffs.

LAL: Sitting 20m over the cap. Have the big fish FA to court but have to pay him over 100m to keep him. Have to deal with an injured Kobe and his 30m deal.
MWP as an untradeable 9m. Nash as an untradeable 18m over 2 years.
Gasol one a one year 19m deal as a disgruntled big who was benched last year.
A run and gun coach who DH and Gasol both really dislike.

You are correct that it is similar to Dallas two years ago EXCEPT the cap is more punitive now and the CBA more restricting.
This is why Cuban disbanded the team that beat the Heat.
Being well over the cap now is very painful because you have very limited means of getting better.

Again and slowly... Your cap amount consists of the players you have signed, any cap holds(i.e. any player's Bird rights, right of first refusal et al cost you his previous salary plus 5%), ~500k per slot up to a full roster, any leftover amnesty hits.
LAL will have rights to as many as 12 guys. Each of those will have a cap cost of some sort unless fully renounced.
Having only Nash under actual contract only means they COULD dump a season totally and renounce everyone.
Your calculation is assuming they do that. It is also assuming they get to 2014 without adding any player on a deal beyond this year.

Dallas has ZERO 2014 contracts EXCEPT the 1.5m for Shane Larkin if he isn't traded by then.
What makes Dallas different than the Lakers is Dirk has already stated they wont need a 23m cap hold for him because he is signing a major pay cut day 1.

For this year Marion was fully expected to opt in and make the 9m. DAL reportedly has an offer at any time from CLE to take Marion.
This would put Dallas 7m under the cap AFTER signing DH.
The only thing Dallas needs to worry about is DH actually wanting to sign here.
If not they are going to to find three 6/7 mil a year players and try to build the nucleus then shoot again next year for a max player.

Again to detail the two teams:
Dallas: 18m under cap today. All its draft picks (except a future r1 to OKC with restrictions) including an extra 2nd next year.
A star player willing to play for a far below market salary.
A quality Coach who has won an NBA title and taken 3 teams deep in the playoffs.

LAL: Sitting 20m over the cap. Have the big fish FA to court but have to pay him over 100m to keep him. Have to deal with an injured Kobe and his 30m deal.
MWP as an untradeable 9m. Nash as an untradeable 18m over 2 years.
Gasol one a one year 19m deal as a disgruntled big who was benched last year.
A run and gun coach who DH and Gasol both really dislike.

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That sums up Dallas' short-term situation well, imo.

I think it also begins to show how prohibitive the current CBA is to teams like LA going forward, or until they get out of cap hell.
Also, as you mentioned earlier, The penalties are no longer just financial, as some seem to think.

I already understand all of that. LAL and Dallas are in almost identical situations except this upcoming season. LAL are over the cap and Dallas is under the cap. Both teams have a clean slate moving forward. Dirk and Kobe are expiring this season.

So, the Lakers pitch will be very similar to Dallas. Hey Dwight, we resign you this season on a max, you play out this season with (basically) our current roster (a few changes will be made) and then one year later we start to build up a team around you as we will have a clean slate. Dirk will take a pay cut to play with you and Kobe will not be playing for 30m but who knows if he doesn't want a max salary for 2 years (what he says he's playing).

Dallas has the advantage of future picks and coaching so I like our chances over LA if that is the route he wants to go. Houston will go the route of teaming up with Harden (bleh) and working with some of the young pieces we already have. I really don't like their situation especially with Asik but we'll see if he likes them. To me, Houston is overhyped as being a better situation than Dallas. Dallas would have had their playoff spot at least with a healthy Dirk last season.

I've been a Rockets' fan since they moved to Houston and I'm a little surprised by this since only about 12 Rockets' fans will get to see his games on TV. Stupid Rockets, they have to have the worst TV contract ever.